Hospital signs exclusive sourcing deal with Philips.

A new $20-million "corporate alliance" with a major medical technology provider will have the Sudbury Regional Hospital (SRH) haggling no more.

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The hospital and Philips Medical Systems Canada (Philips) announced a three-year procurement agreement April 10 that will give SRH access to Philips' Best Pricing and ongoing technical, purchasing and room planning support.

Philips Medical Systems Canada is a branch of Royal Philips Electronics of the Netherlands, which is one of the world's largest electronics companies. It recorded approximately $42 billion (30 billion euros) in sales in 2005.

The hospital has been buying Philips equipment for years. Under the agreement, it will continue to purchase computed tomography (CT or CAT) scanning, catheterization laboratory technology, patient monitoring systems, ECG (electrocardiogram) equipment, and state-of-the-art ultrasound and x-ray technology exclusively from Philips.

It will also get preferred pricing rates for auxiliary, non-clinical electronics.

The deal allows SRH to move forward with site planning and finally paves the way for the completion of the one-site facility in 2009.

It was worked out over the course of several months, but the idea was floated around as early as March 2003 according to John Cieslowski, vice-president of PMSC.

"We are delighted to bring to the Sudbury region some of the most advanced patient-centred health care technology available anywhere in the world," he said.

The deal provides a host of benefits to SRH, saving it money while improving patient care, according to spokesman Sean Barrette.

It will allow the hospital access to cutting-edge technology sooner than it would have through an ongoing, open tendering process. The hospital will work with Philips' research and development arm, effectively performing working tests on the newest technology available.

Having the supplier as a partner will give the hospital an additional tier of support, as Philips will help design the rooms the various pieces of equipment will be placed in.

A request for proposals will be issued by June 30 and a joint financing and construction tender is to be awarded by the Ministry of Public Infrastructure Renewal in November.

Barrette says it will take 18-24 months to finalize construction on the one-site hospital, placing a completion date somewhere in 2009, 13 years after the Mike Harris Progressive Conservative government ordered the amalgamation.

Right the first time

"We want to make sure we do it right the first time," said SRH senior vice-president Joe Pilon.

The design aspect of the deal is not to be underestimated. According to Cieslowski, much of the equipment Philips has installed in the hospital in the many years it has dealt with SRH is quite large. The new equipment will be no different. Cieslowski said it will be much cheaper to design the rooms to allow space for the equipment, the staff using it and of course the patient, at the outset of construction than to have to redesign and reconstruct rooms on an ongoing basis.

That happens all too often, according to Barrette, wasting resources that could be devoted to improving patient care.

With the partnership comes the ability for the hospital to plan out its buying needs years in advance, he continued. That allows Philips to advise the SRH brass on timing.

They may see that the hospital is planning to buy a particular piece in June 2008, for example. Knowing that there is a significant software or hardware advancement being released three months later, the company would advise SRH to hold off a bit in order to take advantage.

"Philips is one of the few companies that have technology in almost all areas of diagnostic imaging," said Cieslowski. "Our research keeps our equipment on the cutting edge."

According to Cieslowski, SRH is not the size of hospital Philips would typically form a corporate alliance with, but it had several things going for it, not the least of which is the Northern Ontario School of Medicine (NOSM). The medical school was mentioned on no fewer than four occasions at the April 10 press conference in the hospital's south tower.

"There is a lot of growth in Northern Ontario, particularly with the Northern Ontario School of Medicine," Cieslowski said.

Pilon mentioned a recently inked agreement with College Boreal that will see new Philips equipment installed on-campus. That will allow students of nursing and other health sector programs to learn on the same equipment they will be operating as SRH employees. Philips is interested in working with other hospitals and schools in the North, including, of course, NOSM.

The hospital will also get preferential pricing on other electronic products that Philips produces, according to Pilon.

Philips will also move existing equipment from the Memorial and St. Joseph's Health Centre sites to the Laurentian site, which is a significant undertaking, he said.

As a regional referral centre, SRH provides hospital-based acute, transitional, rehabilitation and continuing care for over 530,000 residents across northeastern Ontario.

www.hrsrh.on.ca

www.medical.philips.com

By CRAIG GILBERT

Northern Ontario Business